WaMu still haunts Seattle, three years after its closure

Not too long ago, I attended an event in Seattle with a group of former Washington Mutual employees and executives. The topic had nothing to do with banking. That hardly mattered. Whenever there are two or more people in a room with any relation to WaMu, the conversation inevitably turns to that topic. The discussion takes on a hushed tone, as if everyone is speaking about the dead. Of course, they are. It has been three years since WaMu collapsed, marking the largest bank failure in American history.

The conversation at this event was no different than the others, and after we had all said our goodbyes — depending on the group of WaMu employees you are with, they tend to be a lively bunch, and there is always a lot of hugging — I stood outside the event center, waiting for a cab. One of the former employees, whom I have spent many hours with, also was waiting for a ride. We made a little small talk. Then the person turned to me. “Can you tell me what happened to my friend?” the former employee asked meaning former WaMu CEO Kerry Killinger.

Killinger’s tragic trajectory from a humble, frugal leader who painstakingly built the country’s largest savings and loan, to a chief executive who flew around in private jets and steered WaMu into risky mortgage lending, is one of the mysteries that continues to haunt WaMu executives and employees even today. It is one of the many questions that the Puget Sound Business Journal has sought to answer since WaMu’s seizure by the federal government and sale to JPMorgan Chase on September 25, 2008. Click here to read our story about Killinger’s transformation and the bank’s own change.

The Business Journal has also tried to answer much larger, complicated questions: What were the circumstances of WaMu’s failure? What was the federal government’s role? And what was the role of its acquirer, JPMorgan? You can read those award-winning stories here:

Even three years later, there are many questions that remain. I’ve tried to provide more answers in my upcoming book about WaMu, which is scheduled to be published by Simon & Schuster next year.

But the truth is, I could write 10 books about America’s largest bank failure and everyone involved would still likely be haunted by the monumental event. For many, it’s as if the bank collapsed only yesterday. They can recall what the weather was, and what they were wearing. “It still gives me chills to think about,” one employee told me recently. It doesn’t help that WaMu remains in the news: The Federal Deposit Insurance Corp., which seized the bank, recently sued Killinger and two other former executives; settlement negotiations are still underway. The U.S. Attorney’s office just recently ended its three-year investigation without bringing criminal charges against executives.

I had no good answer to that particular question posed by the employee, “Can you tell me what happened to my friend?” Even if I did, it wouldn’t be enough.

KIRSTEN GRIND is a reporter at Portfolio.com. She was a finalist for the 2010 Pulitzer Prize for her coverage of Washington Mutual and the foreclosure crisis for the Puget Sound Business Journal.